Economists have paid close attention to economic development in Southeast Asia, where corruption and bribery are believed to be ubiquitous. In this article, we study the reasons why firms bribe. Specifically, we study the effects of the competition encountered by Southeast Asian firms on their bribing behavior. This article focuses on two types of bribing behavior: (1) informal payments given to the government so that it will ignore rule violations and (2) informal payments to the government to secure a contract. Using firm-level and country-level data from Cambodia, Indonesia, Laos, Myanmar, the Philippines, and Vietnam between 2009 and 2014, we find that the market competition will increase bribing behavior, while political competition within the country will reduce the likelihood of bribing.
Atlantic Economic Journal – Springer Journals
Published: Jan 29, 2018
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